Amidst the slowdown in the Thai real estate market due to various factors and a surge in loan rejections, one industry is thriving! That is the warehousing business, which is emerging as a "rising star," creating a strong growth phenomenon that contrasts with the overall residential and office market.

E-commerce and Foreign Investment: Positive Factors Driving the Hot Industrial Park Market!

Looking back to the COVID-19 period, while many businesses faced severe impacts, it accelerated a rapid change in consumer behavior, particularly the shift towards online shopping and the explosive growth of e-commerce. This pivotal change has continuously benefited logistics, factories, and warehousing businesses, as the expansion of online sales has significantly increased the demand for storage and distribution space.

When we look at the warehousing market in Thailand, it is gaining high recognition due to several key factors. This growth is akin to water seeping into a sand pit, a continuous effect stemming from the COVID-19 period, leading to a significant leap in the rental warehousing and industrial park market in 2024.

According to Colliers Thailand, a full-service real estate firm that is part of Colliers International Group with offices worldwide, the area has seen new lease agreements totaling over 350,000 square meters, covering e-commerce, consumer goods, and distribution centers. This reflects a growing demand for quality space from both domestic and international markets.

The expansion of e-commerce in the ASEAN region is one of the main factors driving the warehousing and industrial park market in Thailand. Not only is e-commerce expanding, but the relocation of production bases from China to the ASEAN region remains a crucial factor propelling growth in the industrial park market, especially in the Eastern Economic Corridor (EEC), which has attracted significant interest from foreign investors, resulting in a 50.12% increase in land transactions in this area during the first three quarters of 2024.

5 Factors Supporting the Thai Warehousing Market, Attracting Demand from Both Domestic and International Sources

The warehousing business in Thailand is being propelled by key factors that have come together perfectly. So, what are the driving forces behind the remarkable growth of this segment that is currently attracting attention? They can be summarized as follows:

  • Growth of E-commerce: Thai consumers continue to shop online, with the e-commerce market expected to grow by about 7.0% in 2025.
  • Relocation of Production: Multinational companies, especially from China, are moving their production bases to the ASEAN region, with Thailand as a primary target due to supportive government policies and confidence from foreign investors.
  • Electric Vehicle (EV) Industry: Investment in the EV sector is positioning Thailand as a manufacturing hub for electric vehicles in the region, attracting related supply chains to invest further.
  • Recovery of Global Trade and Tourism: This has led to an improvement in overall import-export activities post-COVID-19, along with increased demand for consumer goods.
  • Government Policies and EEC Development: The Eastern Economic Corridor (EEC) and improvements in logistics infrastructure are key factors enhancing Thailand's competitive advantage.

This increasing demand has resulted in higher rental prices in certain locations, particularly in Bangkok, where rental offers exceed 200 baht per square meter, and in the EEC area, land prices have risen by 50.12%, reflecting the true growth potential.

In Thailand, the warehousing market has publicly listed service providers that can be divided into two main groups:

  • Industrial Park Group: Focuses on providing storage space and managing goods within warehouses, primarily located in industrial estates/parks such as WHA, FPT, and WIN.
  • Logistics Group: Offers comprehensive logistics services, including storage, goods management within warehouses, as well as transportation and packaging services such as SINO, SJWD, KWC, WICE, III, LEO, and MPJ.

Warehousing Growth Fuels Other Business Growth!

The growth of the warehousing and industrial park business does not end with just one sector; it significantly benefits other sectors in the supply chain, such as manufacturing and export industries like food, medical equipment, and packaging that require more storage and distribution space. Comprehensive transportation and logistics businesses must develop systems and technologies to accommodate the increasing volume of goods, along with infrastructure development, including roads, railways, and ports, to enhance the country's transportation capabilities.

Although the overall real estate market faces challenges, the warehousing business in Thailand shines brightly due to strong supporting factors and genuine demand from the e-commerce sector, the EV industry, and the relocation of production bases. This growth is a clear signal that Thailand remains a highly attractive investment destination with great potential for the future.

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